Democrats Miffed Over Treasury Finding Purported IRS Deception
In exclusive statements to Real Clear Policy, former Democratic members of Congress sounded disapproval with the Internal Revenue Service after a Treasury Inspector General for Tax Administration report demonstrated the agency overstated taxpayers’ approval of its “Direct File” system — the agency’s proposed pilot program to begin preparing American taxpayers’ tax returns in house.
“The decision was made to proceed with a Direct File pilot based upon a 72 percent interest in a Direct File tool, per the Taxpayer Experience Survey,” the Treasury Inspector General report stated. “However, only 28 percent were ‘very interested’ compared to 45 percent who were ‘somewhat interested.’”
The report also criticized the IRS for poor survey design, stating that “the Taxpayer Experience Survey did not provide a ‘neutral’ option for participants” despite research showing that “developing a survey with a five-point scale, to include a neutral option, rather than a four-point scale as used by the Taxpayer Experience Survey, is preferable because it does not put taxpayers into a ‘forced choice’ response scenario.”
In an exclusive statement to Real Clear Policy, Mark Schauer, who represented Michigan as a Democrat in the U.S. Congress, indicated that he fears the IRS is advancing Direct File too quickly.
“Wednesday’s watchdog study shows that the IRS is not taking a data and consumer welfare driven approach to Direct File,” he said. “Many civil rights activists are already concerned about the IRS widening the racial wealth gap, and in congressional testimony this year, the agency admitted to significant racial disparities in its processes. Additionally, it doesn’t seem that the IRS can accurately calculate who qualifies for the Earned Income Tax Credit — one of the most critical tax credits for working families. Perhaps now is the time for the IRS to hit the pause button on Direct File so it can resolve these other concerns.”
Jason Altmire, a former Democratic member of Congress from Pennsylvania who in May opined against Direct File in the Wall Street Journal, suggested that the Treasury Inspector General’s Wednesday report may indicate deliberate agency deception in attempt to move Direct File forward.
“The fact that a December 2022 study from MITRE Corp, the independent entity which operates the Treasury Department’s federally funded research-and-development center, found very little public appetite for Direct File, tells us everything we need to know about the IRS’ intentions here,” he said. “Apparently, it didn’t like the results of this study, so it created a manufactured one that came to its desired conclusion. I commend the Treasury Inspector General for calling this out.”
Chris Bell, a former Democratic member of Congress from Texas, told Real Clear Policy that he is not surprised by the Inspector General’s findings.
“I’m not surprised,” he said. “The IRS has flirted with the tax preparation idea for years. It was never popular with my constituents and supporter base, and it never appeared popular in general.”
Direct File is scheduled to launch as a pilot program in the 2024 tax filing season. Time will tell if Congress uses its oversight authority in an attempt to slow it down.
